ROYAL Dutch/Shell yesterday raised fears that it may have to write down its reserves by more than 1.5 billion barrels — 10 per cent of its total reserves — after the Anglo-Dutch oil company admitted that it was considering its fifth “volume adjustment” this year.

With less than 60 per cent of its reservoir audit completed, Shell was unable yesterday to put a ceiling on the potential downgrade of its reserves, leaving investors in doubt over key issues such as the rate at which it can replace reserves and the average cost for the company of finding a barrel of oil.

Sources within Shell revealed that a well-by-well analysis found evidence of greater decline rates than expected. Shell has therefore been forced to take a more pessimistic view of the likely performance of undeveloped oilfields, the source of the potential billion-barrel downgrade.

Shell, which yesterday announced plans to replace a century-old dual ownership structure with a single company, gave warning that it could be forced to lower its 14.35 billion barrels of reported proved oil reserves by as much as 900 million barrels. The reduction would come on top of a 25 per cent writedown in Shell’s oil and gas reserves this year, which led to the ousting of Sir Philip Watts as chief executive.

Colin Morton, a fund manager with Rensburg, a Shell shareholder, said: “This is very disappointing. We all thought we were towards the end of the reserves downgrades and we are now seeing the likelihood of more, with yet more to come after that.

“Who knows how many more barrels will need to be written down by the end of the audit? It could be more than twice as many (as 900 million), or it could be less, but it doesn’t look like we’ve seen the last of it yet.”

But the stock market welcomed Shell’s announcement that it would become a single company, governed by a single board in The Hague, headed by Jeroen van der Veer, chief executive, and listed in London.

The move will mean about 200 senior UK-based staff switching to the Netherlands. Shell’s oil products and chemicals division, as well as its trading business and finance departments, will stay in the UK, where about 9,000 of the company’s 119,000 staff are based.

Shell’s share price rose by 11¼p, or 2.7 per cent, yesterday to close at 435½p. Analysts attributed much of the rise to the fact that the new-look Shell would represent about 8 per cent of the value of the FTSE 100, compared with about 3.5 per cent now.

William Claxton-Smith, director of corporate governance at Insight Investment, the fund manager, said: “The real reason for the share price rise is that tracker funds will have to more than double their holding in the company as a result of the deal.”

After the restructuring, Shell would become Britain’s second-largest company after its rival BP, with a market capitalisation of about $150 billion.